India's central bank governor,
renowned for forecasting the 2008 financial meltdown, has warned that
the world economy faces risk of another market crash as asset prices
surge.
Increasing
global financial instability stems from investors chasing ever higher
yields, Raghuram Rajan, a former International Monetary Fund (IMF) chief
economist, told the Central Banking Journal.
"True,
it (another financial sector crisis) may not happen if we can find a
way to unwind everything steadily," Rajan, who is famed for predicting
the 2008 markets crash years in advance, said in the interview posted
late Wednesday on the journal's website.
"But
it is a big hope and prayer," said the Reserve Bank of India (RBI)
governor, adding there is a risk of sudden price reversals and sharp
spikes in financial volatility.
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